Hotbed

Iceland is an anomalous place. First, thanks to the Gulf Stream, it isn't all that icy. That would be Greenland, named by Erik the Red, the inventor of travel marketing. That's not to say Iceland doesn't have weather — I experienced four seasons in 30 minutes on a visit to the Gullfoss waterfall. There is an elemental war going on here: The clouds blot out every bit of light, then the sun stabs through in displays of horrible beauty; the postcard-perfect mountains look impermeable, but up close, it's clear they've been raked by watery claws of snow and rain; the ubiquitous lava fields wrestle with hummocks of grass and moss.

Depending on your point of view, Iceland was either the last part of Europe to be settled or the first part of North America to see Europeans. It sits on both continents, astride the Mid-Atlantic Ridge, where the earth's plates are gradually pulling apart, making Iceland a bubbling vessel of magma-heated water. Since its settlement by Vikings in AD 874, the country has remained remarkably isolated. The people — all 300,000 of them, roughly the population of Aurora, Colorado — are as homogeneous as the weather and the terrain are not. Iceland is Appalachia with different rocks.

Their remoteness, however, seems to have made Icelanders particularly resourceful. Faced with essentially no arable land, they built greenhouse farms to raise cucumbers and tomatoes and even bananas. In the fish-rich but almost uninhabitable north, Icelandic fishermen needed special clothing, which spawned 66° North high-tech outerwear, now sold in 15 countries. Icelanders have even managed to turn their own lack of diversity into an advantage: deCODE Genetics, based in the capital, Reykjavik, has built the largest DNA database of its kind (on a per capita basis) to spot disease-causing mutations and use them to develop biotech drugs.

But Iceland's primary innovation, the one that puts it on the map for some of the world's largest companies, centers on renewable energy. The country has no coal, no petroleum reserves, and no trees. (The Vikings leveled the timber centuries ago, leading to this bit of local wit: "What do you do if you're lost in an Icelandic forest? Stand up.") Rather than continue to import every calorie of fuel, Icelanders figured out how to heat their homes with their copious geothermal supply; before long, they were generating geothermal electricity as well. Today, Iceland imports essentially no coal or oil for heat and power: 70% of its energy is renewable. Reykjavik is at the center of this energy vanguard, filling all of its needs from green sources, either geothermal or hydroelectric.

It is here that Iceland's ambition becomes clear. Having shown that it knows what it takes to move from one fuel source to another, this rocky little outpost is ready for something bigger. "We would like to be the world's laboratory for exploring a carbon-neutral future," says Ingibjörg Sólrún Gísladóttir, the country's foreign minister and former mayor of Reykjavik. Reykjavik Power, the world's largest geothermal heating company, and other local firms already export expertise to markets including China and the United States (which is the world's largest consumer of geothermal power and which hopes to boost that usage exponentially). The next step: Proving that cars can run on something other than gasoline. That they can run, in fact, on hydrogen.

Energy Island

On my trip to Iceland last November, I became the first person in the world to rent a hydrogen-powered car. That I could do so was testament to the sheer force of will exerted over 30 years by people like Bragi Árnason. A now-retired chemist at the University of Iceland, Árnason started arguing back in the 1970s that hydrogen could power cars. People mocked him, but he weathered the barbs and slowly won converts, including a wisecracking energy physicist named Thorsteinn Sigfusson, who took the hydrogen-fuel concept out of the faculty club and into the market. Sigfusson helped found Icelandic New Energy (INE), a consortium of energy companies, and was its chairman until recently, when he was asked to run the Icelandic Innovation Institute.

At 6 feet, 4 inches and weighing something like 300 pounds, Sigfusson is part offensive tackle, part Katie Couric. "I'm a people whisperer," he says. Which means he likes to suggest ideas to others and then get out of their way, letting them make it happen. His affable nature has made him Iceland's unofficial ambassador of energy, and he greets groups interested in the country's green-energy prowess with gigantic air bear hugs. "Welcome, friends," he intones in his friendly baritone. "Welcome to Energy Island." During a serious presentation about energy physics, he'll slip in a playful slide on the diet of an energy society, comparing renewables, oil, and coal to proteins, carbs, and fat.

Sigfusson has done as much as anyone to push hydrogen fuel forward, enough that last year he was named a winner of Russia's Global Energy Prize, which rivals the Nobel in payout. He has a book coming out this spring called Planet Hydrogen: The Taming of the Proton.

Hydrogen is a paradoxical fuel, he says. But since it is the most plentiful substance in the universe and throws off only water when burned, it has been hailed as the answer to earth's dual fossil-fuel problems: dwindling supply and the ballooning greenhouse effect. So far, though, most hydrogen fuel is still produced either as a by-product of making fossil fuels or by burning them. In other words, it isn't much greener than oil.

Thanks largely to the persistence of Árnason, Sigfusson, and their colleagues, Iceland has begun making clean hydrogen fuel on a proto-commercial scale. As it turns out, that's a simple enough proposition given one thing: electricity derived from clean sources such as geothermal, hydroelectric, solar, or wind. The Shell station off Reykjavik's Miklabraut road has been producing hydrogen for almost five years, using green electricity to electrolyze water, splitting off the hydrogen atoms and then storing them at high pressure. It's a zero-emissions process.

So if Iceland can make clean hydrogen (locals pronounce it with a hard G), why can't the rest of us? The United States produces enough hydrogen to power 34 million cars, according to the Department of Energy, but 95% of it starts as natural gas and then is reformed in a nongreen process using steam and high pressure. (This hydrogen is used largely in refining petroleum and in creating ammonia used in fertilizer.) Since 1999, Daimler, Royal Dutch Shell, and Norsk Hydro, the $31 billion Norwegian aluminum and energy company (it spun off its energy business in 2007), have been trying to replicate the Icelandic model. All three companies are part of INE, which built Shell's hydrogen station and sparked a 10-city hydrogen bus project funded by the European Union and later expanded to Beijing and Perth, Australia. David Haberman, a longtime investor in hydrogen fuel cells and an early partner in INE, explains that the consortium has already proved three things: Hydrogen is safer than oil or gasoline; people are willing and even eager to use hydrogen to fuel their vehicles; and governments can effectively educate their citizens about an alternative fuel. None of that was clear in 1999. Now the challenge is to roll out this new blueprint to the rest of the world.

Iceland's neighbors are already paying attention. Iceland has been "an important learning project for us," says Per Øyvind Hjerpaasen, VP of hydrogen at StatoilHydro, which was formed in October 2007, when the Norwegian state oil company, Statoil, bought Norsk Hydro's energy operations and in effect formed the world's largest offshore oil-and-gas company. Hjerpaasen says StatoilHydro and others are adapting those lessons as they build HyNor, Norway's hydrogen highway, a string of five or six hydrogen filling stations on the road along the country's southern coast. StatoilHydro will use wind and solar power to produce green hydrogen for these stations; it's also testing a station that uses hydrogen produced from fossil fuels and buries the carbon dioxide — a process that might make hydrogen an option even in places dependent on coal-fired power plants. Once the Oslo station is built, in 2009, the hydrogen highway will go on through Sweden and Denmark to Germany, thanks to a project that's in the works among the four governments and a dozen major industrial firms, including StatoilHydro.

Meanwhile, INE forges ahead. Late last year, it helped the local Hertz to start importing Toyota Priuses, including the one I rented, that had been converted to run on hydrogen. INE will bring up to 40 hydrogen-powered cars to Iceland over the next two years for consumer testing. And in April, it will launch a whale-watching boat that uses hydrogen to run its auxiliary power system, the first time hydrogen has been used aboard a ship.

Hydrogen's Bill Gates

My first trip in the hydrogen Prius — known in the business as an H Prius — was to see one of Sigfusson's protégés, Hallmar Halldórs, who runs his new company, Icelandic Hydrogen, in a suburb of Reykjavik. I set off during rush hour, my heart racing at every rotary for fear of being the first person to crash a hydrogen car. (They don't blow up like the Hindenburg in a collision, but at $100,000 a pop, my terror was justified.)

It was just a decade ago that hydrogen cars had room for only a driver — the rest was given over to storing the fuel. Today, the only visible difference between my H Prius and the regular version is that the spare tire has to sit in the trunk.

After Halldórs checks out my car, he shows off his company. "We have a little work to do," he says with a grin, ushering me through a door in the machine shop owned by his business partner. Across the threshold, I find myself standing on a recently poured concrete slab — under a rainy Icelandic night sky.

The 37-year-old Halldórs — he repaired ship engines before starting his PhD in physics and getting hooked on hydrogen — is well aware of the distance yet to travel. Still, he may just be hydrogen fuel's Bill Gates, circa 1977: His dream is a refueling station in every garage. He even has a working prototype, adapted from laboratory equipment, which looks like a PC server, only with tubing and a container for water. Right now, it can make about 1.5 kilograms of pressurized hydrogen fuel in a day, good for about two-thirds of the capacity of my Prius's tanks.

Halldórs's four-person company is pursuing a number of other ideas, including the possibility of small-scale filling stations that generate enough hydrogen to fuel three or four cars a day, about one-twentieth the capacity of the Shell station on the other side of Reykjavik. His partner has built a stainless-steel dispenser prototype. And Halldórs says he has already sold some related technology to two customers abroad, though he won't name them.

Like any good visionary, Halldórs thinks hydrogen fuel is coming fast. In fact, he expects there will be a substantial market by 2015, and not just in Iceland: "We like to say we will make it happen."

Winning investment and interest from outside the country has been perhaps the biggest hurdle. But there are plenty of others. H cars still need better fuel cells and a network of filling stations at least as extensive as diesel's. Then there's the distribution and storage problem: At high pressure, hydrogen simply seeps through the molecules of conventional steel, so traditional trucks and tanks are useless. (Scientists are experimenting with things like composite materials, bonding hydrogen to vehicle frames, or using nanoscale storage devices, to get around this problem.)

But as Bill Reinert, national manager in the advanced technologies group for Toyota Motor Sales, points out, hydrogen cars have been seriously researched for only 15 years. It took Toyota more than 10 years just to sell a million copies of the hybrid Prius — and that's for a car that slides right into today's fuel infrastructure. Reinert figures the U.S. government spends $16 billion to $20 billion, including subsidies, on ethanol. Toyota alone, he says, spends more on hydrogen research than does the entire U.S. government.

Coming to America

Hydrogen's appeal in the quest to replace oil is not simply that there's so much of it but that it works so well. "Hydrogen fuel cells are the only way to get vehicles that perform like a gasoline vehicle," says Britta K. Gross, General Motors' manager of hydrogen and electrical infrastructure commercialization. H cars refuel quickly, and they can match gas-powered cars for range. But — once more for emphasis — there are no emissions.

Oil approached $99 a barrel while I was in Iceland. Back home, the news seems full of hydrogen. Honda says it will begin a controlled leasing program this year in Southern California for its FCX Clarity fuel-cell car. GM, desperate to recover its mojo, has rolled out the first phase of Project Driveway, a 100-car pilot in Los Angeles and New York, which will move on to Washington, D.C., and eventually Europe and Asia; select drivers will get a hydrogen-powered SUV, the Equinox, for periods ranging from three months to several years. To fuel those cars, GM, along with Shell Hydrogen and another large energy company it won't yet identify, is building 10 hydrogen filling stations across the country, including one in the Bronx, not far from Yankee Stadium. While none of the stations will produce its own hydrogen (some will come from a green facility in Niagara, New York), all are seen as part of a proof of concept.

Gross says that H cars have become far more than an experiment for GM. While the company plans one more prototype model to succeed the Equinox, it is already gearing up to bring H cars to a dealer near you at a price that won't leave you gasping. Like Honda, GM has pushed the hydrogen car well past the R&D phase: While it doesn't quite have a hydrogen-car division, Gross says H cars are now part of GM's mainstream organization, with an engineering chief, a vehicle line director, and a manufacturing and marketing staff. GM plans to be ready to produce them commercially in 2013.

Gross has been to Iceland twice. "It's absolutely shaped my thinking on how you do this," she says. She calls the will of the country "eye-opening," and marvels at its ability to get government and industry focused on the same goal, something the United States has failed to do. The hydrogen economy cannot happen here without such coordination, she says. INE's general manager, Jón Björn Skúlason, agrees, pointing out that one reason Iceland has made such progress is that his outfit manages every aspect of Iceland's hydrogen economy, a degree of command and control the United States hasn't even attempted. Now, says Gross, an ad hoc "H gang" of five automakers (including GM), as well as oil companies, hydrogen merchants, and government officials, have started meeting to talk about how America can follow Iceland's lead.

Project Driveway's focus on just three cities, she explains, is a way of proving the possible. "You have to break it apart for anyone who says it's a $400 billion exercise," she insists, "or you will never get 1 million vehicles out there. You have to demonstrate what you can do."

Even if hydrogen does end up the long-term replacement for oil, there will be bridge fuels along the way. In fact, the post-oil economy may be a patchwork of local solutions, says Barbara Heydorn, director of the Center of Excellence in Energy at SRI, a California-based research nonprofit. Heydorn points out that localized markets exist even now, Brazil's sugarcane ethanol being a prime example. Similarly, more than a quarter of the cars in Bangladesh run on natural gas, as do 1.6 million cars in Argentina and almost 500,000 in Italy. "Just as there are regional variations for what cars are available," she says, "fuel will be one more piece of the puzzle automakers will have to accommodate."

Where, exactly, hydrogen will fit isn't yet clear. But governments, automakers, and people worldwide are increasingly motivated to figure it out.

In Reykjavik, over a horse-meat lunch at the iconic Hotel Holt, Thorsteinn Sigfusson reflects on what he has wrought so far. To him, it's clear that oil is doomed. "Hydrocarbons are a mishap, a sigh in time," he says. "We provided the scenario for testing hydrogen. We've shown that it is the ultimate fuel. Nobody doubts that now."

Michael Fitzgerald writes on business and technology for The New York Times and The Economist. He lives near Boston.

Geothermal power from facilities such as the Svartsengi Power Plant has helped Iceland all but eliminate oil and coal imports. | Photo by Rob Howard

A version of this article appeared in the April 2008 issue of Fast Company magazine.

To those opposed to using fresh water for hydrolysis, perhaps we should review basic science. The products that are obtained from hydrogen combustion, as I recollect from grade school science class, are LARGE amounts of energy and pure water vapor; which is returned to the atmosphere and ultimately produces rain clouds.

As to the storage of hydrogen, don't forget that the energy obtained from one unit of hydrogen is roughly 3 times that of gasoline, which is also (by definition) a combustible substance. The requisite storage, therefore, would only have to accommodate one third that of a standard gas tank.

Internal combustion engines are also well suited for hydrogen combustion, with modifications to the fuel delivery systems. We needn't be discussing the use of fuel cell systems, which utilize catalysts to produce electricity.

The only problem with hydrogen economies, thus far, has been the necessary energy needed for hydrolysis. This has been a costly process; especially since it has been affected with fossil fuel based energy production, somewhat mitigating the benefits. The use of solar, or other non-finite fuel based hydrolysis systems, however, make water hydrolysis far more economical in the long run; as fixed cost energy generation systems (so called "renewable" systems that are purchased/financed once, at a fixed interest rate and payment) are more economical than variable cost-based systems (i.e. energy generation systems which consume fossil fuels which, in turn, continuously increase in price over time) over time.

With gas at 3.50 per gallon (as a finite, aka fossil fuel example), and rising, the advantage of developing and using non-finite fuels will only increase with time, and accelerate with the growing consumption of fossil fuels by emerging economies such as China and India.

Your poorly written and researched article clearly demonstrates your lack of any basic level of science or economics.

Any junior high school student already knows hydrogen can power just about anything, ie: cars, homes, computers, etc.

Your poorly written article failed to address two fundamental problems with hydrogen power:

1) Making of hydrogen fuel.

Hydrogen doesn't just grow on trees, nor can you just simply pull it out of your arse.

Natural gas is not a solution to the problem of making hydrogen because it is a limited resource just like oil. You basic understanding of economics is clearly lacking too since you failed to note the price of natural gas recently given the demand.

You failed to mention in your article that using electrolysis to split fresh water into hydrogen and oxygen requires an ENORMOUS amount of energy. Just where will this enormous amount of required energy come from Michael Fitzgerald, solar?, geothermal?, wind?, hydroelectric?, corn or sugar cane based ethanol?, oil?, coal? Again, you clearly demonstrate your lack of knowledge in science and economics.

2) Fresh water (not salt water) for electrolysis is also a very limited resource.

It is no secret that much of the world is already seeing a shortage of fresh water. Should you use electrolysis to make hydrogen to power cars and other things, Michael Fitzgerald, what happens to the world's already limited supply of fresh water?

Your article mentions Brazil's use of sugar cane to produce ethanol. The U.S. grows corn to produce ethanol. These are thoughtless energy policies as well. Have you noticed recently the rapidly inflating price of food since we have been using food to power our vehicles rather than putting it on the table to eat? Many poorer countries ie Haiti, Mexico, are suffering from riots and more instability recently due to the rapid inflation of food prices. (Do a little research next time will ya?) Study the macro economics of commodities while you're at it.

Don't get me wrong, I support hydrogen to power our vehicles as well, and I also support nuclear power with the reprocessing of nuclear fuel and breeder reactors.

To Michael Fitzgerald:At least make an attempt to address these fundamental issues lacking in your article, or if that's too difficult for you, then you could always go back to writing about Britney Spears and Paris Hilton for the National Enquirer.

P.S. Between this article on hydrogen, and the cover of the magazine for April 2008, maybe the credibility of "Fast Company" magazine is close to that of the National Enquirer already.

Study Sees Hydrogen Problems Requiring Decades To Solve Use of hydrogen to transport and store enerfgy is still a distant prospect.

WEST LAFAYETTE, Ind. – Researchers conclude in an article to be published in June that it could take "several decades" to overcome daunting technical challenges standing in the way of the mass production and use of hydrogen fuel cell cars.

The article notes that "success is not certain" in efforts to develop inexpensive, hydrogen-powered fuel cells and to create the vast storage and transportation infrastructure needed for the vehicles, stressing that hydrogen's "wide-scale use is laden with potential technical, economic and societal impasses." In case fuel cells never do become practical for cars, the researchers conclude, it would be wise for the nation to "maintain a robust portfolio of energy research and development" in other areas.

The article will appear as the cover story in the June issue of the AIChE Journal, a publication of the American Institute of Chemical Engineers. The article was written by Agrawal, Martin Offutt, from the National Research Council, and Michael P. Ramage, a retired executive from ExxonMobile Corp.

Fuel cells cost too much to build and have short operating lifetimes.

"Today's fuel cells generate power at a cost of greater than $2,000 per kilowatt, compared with $35 per kilowatt for the internal combustion engine, so they are more than 10 times more expensive than conventional automotive technology," Agrawal said. "At the same time, fuel cells have an operating lifetime for cars of less than 1,000 hours of driving time, compared with at least 5,000 hours of driving time for an internal combustion engine.

"That means fuel cells wear out at least five times faster than internal combustion engines. If I buy a new car, I expect it to last, say, 10 years, which equates to about 3,000 hours of driving time. If my fuel cell only lasts 1,000 hours, you can see that's not very practical."

Cheaper and longer lasting catalysts are needed. Plus, in order to use fuel cells to burn hydrogen the hydrogen transportation and storage problems need to be solved.

To bring down the cost of fuel cells, less expensive catalysts and membrane materials are needed, Agrawal said.

Developing an infrastructure of hydrogen storage and transportation represents other significant challenges.

"A fuel-cell car built with today's technology would cost about $250,000, but you would have no place to fill up the tank," Agrawal said.

Hydrogen is a light gas, which makes it more expensive to transport and store. Because its molecular weight is only 2 – compared with heavier gases, such as methane, which has a molecular weight of 16 – less hydrogen is contained in the same space as heavier gases, making its transport more expensive.

Agrawal sees hydrogen vehicles starting to show up on the road in the year 2020.

"I believe we can probably solve the technological problems related to making hydrogen fuel cells practical as a replacement for the internal combustion engine, but it won't be easy and it likely won't happen very soon," Agrawal said. "An optimistic prediction would be that a significant number hydrogen fuel cell cars will be entering the marketplace around 2020, and by 2050 everybody will be driving them."

But that is an optimistic prediction. A lot of problems must be solved to even start hydrogen deployment in 2020. In the meantime the market for gas-electric hybrid vehicles is going to become quite large. Many of those hybrids will be pluggable and some people will be charging them from their home outlets. Photovoltaics might drop to the point that a portion of that car battery recharging will be done using electric generated right at home.

Suppose nuclear power experiences a resurgence. Hydrogen could be generated at nuclear plants. But if superconductor technology continues to improve and battery technology does as well then superconducting power lines which suffer no resistance might deliver nuclear power to electric vehicle batteries more conveniently at home at a lower cost than a hugely expensive infrastructure for delivering hydrogen to fuel stations.

In my view hydrogen's eventual role as primary vehicle fuel is by no means assured. Future solutions to hydrogen's technological problems will not compete with today's other energy technologies. Hydrogen's supporting technologies will compete with tomorrow's batteries, superconductors, and other energy technologies. Those competing technologies will be delivering benefits decades before hydrogen begins to do so and therefore industry, academic, and government labs will continue to refine those other technologies. By the time hydrogen is ready the competiton might be too firmly entrenched and cheap to be dislodged.

Fuel cells have a future independent of hydrogen. If the cost and durability problems with fuel cells could be solved for burning hydrocarbon liquid fuels then fuel cels could be adopted much more rapidly as a more efficient way to burn fossil fuels. Liquid fuel burning fuel cells could even work in hybrid vehicles with batteries providing increased efficiency through regenerative braking.

Another characteristic of hydrogen fires is that the flames tend to ascend rapidly with the gas in air, as illustrated by the Hindenburg flames, causing less damage than hydrocarbon fires. Two-thirds of the Hindenburg passengers survived the fire, and many of the deaths which occurred were from falling or from diesel fuel burns